What does Maduro's victory imply for China?

Nicolas Maduro, Venezuela's newly elected president, is aware of walking in the footsteps of a giant of modern Latin American history. The prestige of Hugo Chavez, his predecessor, was matched in that continent in the present era only by Fidel Castro and Che Guevara. Maduro, who I discussed economic policy with several times, therefore must deal with issues facing Venezuela with a different style to his predecessor and naturally does not carry the personal support of his predecessor. This is reflected in his receiving 50.6% of the vote in the presidential election compared to 55.1% for his predecessor in 2012, with turnout falling from above 80% to somewhat below it. But this does not necessarily mean less success in developing the country.

China should be familiar with this. No subsequent Chinese leader could enjoy the personal position of Mao Zedong or Deng Xiaoping in creating the People's Republic of China, but this did not prevent their successors from achieving further major steps in the national revival of China. What continuities and changes in Venezuela may be expected with Maduro as president?

Maduro was a long serving Venezuelan foreign minister charged with delicate discussions with both friendly and hostile governments. But his political origins combine discipline and organization with links with the population. Maduro is famous for being a bus driver and organizing a transport union but before that, in 1986, he studied in Cuba for a year. Focus and organization, combined with tactical flexibility, attributes shown in Maduroâ€™s career, are in accord with Cubaâ€™s politics. Maduro is known as an admirer of China. One of the first delegations he met after becoming acting president was Chinaâ€™s. He therefore understands that relations between Venezuela and China have the potential of a â€˜win-winâ€™.
â€˜Venezuelan characteristicsâ€™ strongly mark socialism in that country just as much as Chinaâ€™s have â€˜Chinese characteristicsâ€™. This affects style and substance. In style the Latin American character of the presidential election campaign was different to the politically diverse styles of either China or Europe. But the key policy choices can be generally understood.

Venezuela and Saudi Arabia are the countries with the world's largest oil reserves. Oil will be the core of Venezuelaâ€™s economy for a prolonged period. National revival in Venezuela, the reason for Chavezâ€™s prestige, was that for the first time the wealth generated by that oil was used for the benefit of the countryâ€™s population rather than being lodged in foreign banks. The programs of social improvement Chavez launched â€“ health, poverty reduction, housing construction - underpinned his popularity.

If Simon Bolivar was Venezuelaâ€™s first great national hero for securing the countryâ€™s political independence, Chavez was Venezuelaâ€™s second historical hero for securing the countryâ€™s economic independence. This combination of patriotism and social improvement were Chavezâ€™s appeal and the tradition Maduro continues.

Oil, which is the foundation of Venezuelaâ€™s wealth, creates not only benefits but also specific problems in addition to the normal ones facing a developing economy. The oil industry requires enormous investment but employs relatively few people â€“ creating a problem of creating enough jobs. Oil wealth leads to a high exchange rate, creating difficulties for other Venezuelan industries to compete internationally.

Oil is also the reason for the sharp character of the political struggle in Venezuela compared to a Latin American country such as Brazil. Because Venezuela has one overwhelmingly dominant resource, oil, either patriotic forces or comprador forces control it. There no room for compromise in the way that there is in a more complex economy such as Brazil. Each Latin American country is specific.

Venezuela, as a medium income developing economy, needs simultaneously to secure the best possible imports for its population, bought with oil income, but also to build up production within its own country. China is an ideal partner. Chinaâ€™s medium technology manufactured exports fit Venezuelaâ€™s market, while Chinaâ€™s large companies have resources to invest in production in Venezuela itself. But simultaneously Venezuela helps China diversify its sources of oil imports, making it less dependent on any one supplier. This is the basis of the â€˜win-winâ€™.

Maduro is aware of this. As foreign minister he dealt personally with relations with China. But he was also concerned with the interrelation of international relations and economic policy. At the beginning of the latest phase of the international financial crisis President Chavez jointly charged the economics and foreign ministry with helping analyze this and how Venezuela should respond. Their policies helped lay foundations of President Chavezâ€™s re-election and Maduroâ€™s electoral victory.

Maduroâ€™s electoral victory is his countryâ€™s choice, but it means a friend of China remains in Venezuelaâ€™s presidential palace.